Bond yields edged lower, as market-participants drew comfort from reports which stated Finance Minister P Chidambaram urging Reserve Bank to 'walk in the same direction' as the government by cutting interest rates in response to sweeping reforms.
RBI has held interest rates steady at 8 per cent in its mid-quarter review of monetary policy on September 17, even as the government announced a dramatic series of reforms on September 13-14.
On the global front, US 10-year Treasuries dipped on Monday, as House of Representatives Speaker John Boehner's offer to accept a tax rate increase for the wealthiest Americans stirred hopes for a deal to avoid a looming fiscal crisis. Meanwhile, Brent crude held steady above $108 a barrel on Monday, drawing support from a brighter economic outlook for top energy consumer China.
The yields on 10-year 8.79% - 2021 edged up 1 basis point to 8.16% from its previous close of 8.15% on Friday.
The benchmark five-year interest rates fell 1 basis point to 7.62% from its previous close of 7.63%.
The Reserve Bank of India has announced the auction of 91-day and 182-day Government of India Treasury Bills for notified amount of Rs 5,000 crore each. The auction will be conducted on December 19, 2012 using 'Multiple Price Auction' method.
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